Tribal Gas Stations Get a Sweetheart Deal in Washington

Gov. Chris Gregoire says she was forced to give tribes a break on taxes, but some lawyers say that doesn't pass the smell test.

Is the state helping Native American gas stations undercut their off-reservation competitors? That’s the claim of a lawsuit that got a go-ahead from the state Supreme Court last week—a case that deals not just with tribal sovereign immunity, but tens of millions of dollars in taxpayer money.

That money is paid to tribes around the state by virtue of a series of gas-tax compacts negotiated by Governor Chris Gregoire. The governor couched these compacts as a compromise. The state had been wrestling for years with tribes over whether they are obligated to pay gas taxes. Under the compacts, the state refunds 75 percent of such taxes paid by the tribes or reservation gas stations.

“The stench from these agreements is so great,” claims former Supreme Court judge and legislator Phil Talmadge, who is representing the plaintiff, a trade group of gas retailers around the state called the Automotive United Trades Organization.

First of all, Talmadge argues in an interview with SW, the state doesn’t need to refund any money at all. That’s because the state isn’t directly taxing tribal gas stations. It’s taxing non-tribal wholesalers; tribal gas stations pay the tax when they buy, not sell, gas. Talmadge says this form of taxing the tribes has been given the OK by the U.S. Supreme Court in a related case. So he says the governor is simply doling out money to the tribes, something that in his brief he calls an “abuse of authority.”

Secondly, Talmadge says that both the compacts and the state constitution require the money given to the tribes, since it is derived from gas taxes, to be used on road projects. Yet, he says, the tribes are not required to provide any accounting to the state which would verify that the funds are being used correctly. And he says the very few reports there are show some funds being used incorrectly—for “trails, a police dog, a community facility.”

His theory, though, is that most of the money—now more than $30 million a year, he says—is going to one thing: subsidizing tribal gas stations so they can offer lower prices.

Assistant state Attorney General Rene Tomisser asserts otherwise. “We know that by and large the tribes are spending the money appropriately,” he says, although he concedes that there may be exceptions. “Has every dollar been spent correctly? I don’t know.”

One of the thorny things about this suit is that it names the state—not the tribes—as defendants. But the tribes are clearly affected, as the state points out in its legal papers—the ones that will or won’t get tens of millions of dollars in funding, depending on the outcome.

In Grays Harbor County Superior Court, where the case was filed, a judge ruled that the tribes were therefore “indispensable” to the proceeding. And since tribes can’t be sued due to sovereign immunity, he dismissed the case.

In last week’s divided ruling, the Supreme Court reversed the lower court’s opinion. While the tribes are affected, the Supremes opined, it is the state’s conduct that is most at issue here, and the state has no business raising sovereign immunity as a defense. Asserted the ruling: “Sovereign immunity is meant to be raised as a shield by the tribe, not wielded as a sword by the state.”


Talk to us

Please share your story tips by emailing editor@seattleweekly.com.

More in News & Comment

Courtesy photo
State demanded more drop boxes, and now it must pay for them

A King County judge says a law requiring more ballot boxes was an illegal unfunded mandate.

Puget Sound renters will need housing assistance

Nonprofits, activists are expecting greater need as workers are laid off.

Stock photo
King County domestic violence homicides reach 16 so far this year

Previous two years had seven each as COVID-19 impacts incidents

King County 2020 unemployment numbers. Source: Washington State Employment Security Department
Boeing, coronavirus likely to impact King County economy

Unemployment remained high in September.

t
Smith, Basler running for District 9 Congress seat

Republican challenger takes on Democrat incumbent.

File photo
State Supreme Court strikes down $30 car-tab initiative

Justices unanimously agreed that voter-approved Initiative 976 is unconstitutional.

t
Kent girl, 12, dies trying to help her mother during seizure in car

Miranda Bhattacharyya ’always put the well-being of others before herself,’ family says

Hilary Franz (left) and Sue Kuehl Pederson
Wildfires, forest health are key issues in race to lead DNR

Republican Sue Kuehl Pederson is challenging incumbent Commissioner of Public Lands Hilary Franz.

power grid electricity power lines blackouts PG&E (Shutterstock)
State extends moratorium on some electric, gas shutoffs

Investor-owned electric and natural gas utilities in WA can’t disconnect customers through April.

Screenshot from the state Employment Security Department’s website at esd.wa.gov.
State still sifting through thousands of unemployment claims

The recent Lost Wages Assistance program pumped an extra $625 million to Washington’s unemployed.

Washington Democratic Gov. Jay Inslee (left) and Republican challenger Loren Culp during Wednesday's debate. (TVW) 20201007
Inslee, Culp joust on COVID, climate, crime in feisty debate

In their only televised match-up, the two gubernatorial candidates differed on pretty much everything.

Gov. Jay Inslee during his Oct. 6 news conference. (Screenshot)
Gov. Inslee loosens rules for bars, libraries and movie theaters

New rules come as coronavirus cases are on the rise statewide.